Voluntary redundancy package versus Compulsary

jonnyb1978

A friend has just been given a voluntary redundancy package and is confused of what the package is worth over compulsary. IE. How much may she lose if they don't take voluntary and is forced to go

The package:
Statutory Pay £7500
Voluntary Payment £1500
Notice period weeks (12 weeks) £4400
Holidays owed £425
Pension £200

Total £14000 approx

If she declines and is then forced to go what portion of this do the company still have to pay. I am thinking the voluntary payment will obviously go and they can also make you work your notice, therfore no pension contributions up front.

So a payment of £8000 approx is the amount they have to pay, which in effect is just the statutory pay and any holidays owed.

Is this correct?

Company are asking for volunteers. Then compulsory will be looked with criteria and score system applied . There is 2 redundancy from four people . They want a decision by next Wednesday.

Any help appreciated.
Thanks

getmore4less

crucial information missing.

Age(DOB)
start date
weeks pay as defined by the legislation, if unknown state salary

expected notice date
expected termination date

System

jonnyb1978 wrote: »

A friend has just been given a voluntary redundancy package and is confused of what the package is worth over compulsary. IE. How much may she lose if they don't take voluntary and is forced to go

The package:
Statutory Pay £7500
Voluntary Payment £1500
Notice period weeks (12 weeks) £4400
Holidays owed £425
Pension £200

Total £14000 approx

If she declines and is then forced to go what portion of this do the company still have to pay. I am thinking the voluntary payment will obviously go and they can also make you work your notice, therfore no pension contributions up front.

So a payment of £8000 approx is the amount they have to pay, which in effect is just the statutory pay and any holidays owed.

Is this correct?

Company are asking for volunteers. Then compulsory will be looked with criteria and score system applied . There is 2 redundancy from four people . They want a decision by next Wednesday.

Any help appreciated.
Thanks

Voluntary payment will go.

She will be taxed and pay NI on her 12 week notice regardless if she works it or not. It's rare for a company to ask you to work 12 weeks notice so would be very surprising if that happened.

It's a shame that she couldn't have got these answers direct from HR or whoever at the company.

jonnyb1978

Age 42 (24/07/1975)
Start date 01/09/1992
Weeks pay £368.13

Redundancy date 04/08/2017

getmore4less

20.5 weeks statutory redundancy = £7546.67
12 weeks notice = £4417.56
now if they want to terminate by 4/8/2017(2 weeks) they will have to give some of the notice as PILON even if they gave notice today but it looks like it will be a while before they give notice if still at the asking for volunteers stage.

holidays accrue to date of termination.

jonnyb1978

Thanks. They are offering 12 weeks notice period paid in lieu.. So my friend d would leave 04.8.17 and receive the 12 weeks pay.

Sounds above board but the voluntary redundancy of 1 months pay as enhanced payment does not seem to justify 25 years of service, when the same person with 3 years can get the same.

Undervalued

jonnyb1978 wrote: »

Thanks. They are offering 12 weeks notice period paid in lieu.. So my friend d would leave 04.8.17 and receive the 12 weeks pay.

Sounds above board but the voluntary redundancy of 1 months pay as enhanced payment does not seem to justify 25 years of service, when the same person with 3 years can get the same.

So called voluntary redundancy is whatever is negotiated between the employer and employee. What somebody else is being offered may be a useful negotiating tool but that is all. There is no obligation to offer everybody similar terms. Be definition your friend can reject the offer. In which case they will either keep working or, if the firm have proper legal grounds, be made redundant and receive only what is laid down by law. Their only remaining option, if they didn't think the redundancy was genuine, is to claim unfair dismissal.

Wookey

Does she have a mortgage with insurance for redundancy? If so compulsory would mean she would be entitled to claim on this insurance, voluntary would mean that she couldn't unless it's written into it that she can, there may also be issues claiming on JSA by taking voluntary. For me it would come down to the ability to find another job inside a few weeks of going voluntarily weighed against the difference in money between the two and what i would receive from payouts if i was not able to obtain another job.

ReadingTim

Generally speaking, any voluntary redundancy offer is going to be more generous than statutory as the company is looking for volunteers, so will try to make the offer look appealing (and save themselves going through the consultation process with the time and distractions that brings).

If no-one takes the bait (as it were) and the process becomes compulsory, the offers (if any) are usually not as good as people aren't in as strong a position.

If your friend is looking for a way out, or isn't hopeful that the whole thing won't go belly up anyway, it's probably better to take the money and run....